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One strategy to play Match Group's rally to records, investor says

One dating stock could be headed for highs, trader says

One investor is betting on love in the time of Covid-19.

Todd Gordon, managing director of Ascent Wealth Partners, said Match Group could be headed higher.

"It's a stock that we've been tracking and holding in our global growth strategy at Ascent," Gordon told CNBC's "Trading Nation" on Thursday. "According to [Ascent Chief Investment Officer Scott McCartney], this is a clear market leader in a secular growth category within our new virtual normal as a response to Covid-19 and social distancing."

Gordon also sees a bullish case forming in the charts. The stock, he said, is attempting to break out above resistance at $100 after surging 116% off March lows. The shares were trading above $96 on Friday afternoon. Match Group hit an all-time high of $99.43 earlier in the day.

To take advantage of a move up above $100, Gordon is opting for a stock replacement strategy where he buys the Delta 70 call with Aug. 21 expiration – this is a bet that Match can break higher heading into and following Aug. 5 earnings. The Delta 70 call option acts as 70% of the stock – when the stock rises $1, the underlying option increases by 70 cents.

"Back to the fundamental thesis, we think Match customers prefer sort of a stand-alone dating app thus Facebook's efforts to enter the space are not really a concern and recently they settled litigation with Bumble – this is a privately held competitor – which is bullish," he added.

Match is expected to post earnings of 45 cents a share for its June-ended quarter, according to FactSet. That implies 5% profit growth. 

 Disclosure: Ascent Wealth Partners holds Match.